Providing Hope

In June I got a dreadful little postcard stating that I had to pay $100 to renew my license plates. Instantly it made me think of much cooler ways of spending that cash. Now, the $100 didn’t break the bank and it’s one of those things you just have to pay.  

I’m sure people who earn less than me have a harder time dealing with such fees, since it takes up a larger percentage of their paycheck.  But what if you got a $1,000 renewal fee?  What if you only made $11,300 before taxes last year?  Those things you “just have to pay” become a huge burden. 

This is the actual cost for the fees associated with the renewal of permanent residency that one of our members recently needed help with; and yes, that is her income. Esperanza had to come up with $1,000 to renew her green card and service provider fees. She did it not for a car, a vacation or to go shopping, simply to have her documents updated. If another job opportunity came her way, with an expired green card she may not be able to leave her 3rd shift job cleaning a grocery.

I share Esperanza’s story to illustrate the real financial needs of immigrants and refugees. The story also illustrates an opportunity to provide financial services to a growing segment and a way to address some of the challenges credit unions and other industries face today.  

Industry challenges

  • Slow growth of credit unions and banks – many are merging to be sustainable. One estimate says that every day one credit union either closes its doors or merges with a larger credit union.  
  • Increased scrutiny of financial institutions is cutting into profits leaving financial institutions to look for other ways to increase revenue. 
  • Aging population and membership of credit unions and banks – many members are retiring and not in their prime borrowing years. 

Opportunities in serving immigrants

  • Immigrants tend to be younger, boast large families and are in their prime borrowing years. 
  • According to the FDIC 40-55% of Latino immigrants are unbanked.
  • Significant workforce participation.

Credit unions talk about the “people helping people” founding philosophy – this means all people.  Immigrants are often overlooked by many industries. They need financial services and we need more new member so we don’t fall by the wayside. 

While providing small loans and helping families that don’t have great paying jobs may not seem as profitable now, I would ask all decision makers if they plan on being in business in the next 20 to 30 years. Immigrants provide a solution to real growth concerns of many organizations. Ascentra does this not only because it is good for our community, but it makes good business sense. 

Our partnership

Ascentra Credit Union has been working with the immigrant community for years. It started with having the right staff, a clear strategic plan and an understanding that it would take time.  We knew our outreach efforts were not a sprint, but a marathon.

When presented with an opportunity to partner with the non-profit immigration services provider Diversity Services Center of Iowa (DSCI) the timing was right. We have the staff, the products, procedures, marketing, but most importantly the trust of the immigrant community.  

Our partnership allows DSCI clients who don’t have the funds to pay for costly immigration services to get a low interest loan through Ascentra. This will allow immigrants who struggle to save up the money required to pay for these fees, all while stablishing and/or improving their credit. We will provide financial education workshops for participants to attend as well and introduce many to mainstream financial products. 

We are poised to deliver on an initiative that will have a profound impact on the lives the clients of DSCI, our members, our community, our region, our industry and ultimately our nation.  As you are reading this, the first clients will be going through this initiative. Some will be paying to file their citizenship and will eventually fulfill their full potential as citizens of the United States by participating in their civic duty of voting. And while I’m limited on space, I hope to share more of their stories in the near future.  

As a person who scrounged up the cash to pay for my citizenship application fees at a young age, I would have greatly benefited from such a program and am confident clients will be forever grateful to us not just for the loans but for providing hope.

Alvaro Macias